Fresenius Lifts Outlook again on Rivals' Shortages
German healthcare conglomerate Fresenius on Monday raised its 2012 profit outlook for a second time this year as its injectable generic drugs unit Kabi continues to benefit from rivals' supply shortages.
It now sees net income before special items up by between 14 and 16% when adjusted for currency swings and excluding effects of the planned takeover of Rhoen-Klinikum.
In April, it had raised its guidance to predict growth of 12 to 15%.
It also now expects an adjusted increase in sales of 12 to 14%, compared with a previous outlook of the upper end of a 10 to 13% range.
Kabi's U.S. business, formerly called APP Pharmaceuticals, is winning windfall profits from rivals' production blunders, which have caused shortages in the supply of dozens of injectable generic drugs including the widely used anaesthetic propofol.
"Particularly in the U.S., revenue growth has been materially stronger than initially projected, mainly due to ongoing intravenous drug shortages, including (of) Propofol, which may continue well into the third quarter," the group said.
The growing scarcity is one of the biggest issues confronting U.S. hospitals, blamed by health officials on industry consolidation that has left only a handful of generic manufacturers of these drugs, even as the number of drugs going off patent is growing.
Some drugmakers have been plagued by manufacturing problems that have shut down plants or production lines, while others have stopped producing a treatment when profit margins erode too far.
